By WSJ City
Nintendo is shifting some production of its Switch videogame console to Southeast Asia from China to limit the impact of possible US tariffs on Chinese-made electronics, said people who work on Nintendo's supply chain.
--- The US increased import tariffs last month on $200bn of Chinese goods to 25% from 10%.
--- It proposed tariffs on an additional $300bn of goods which would cover smartphones and videogame consoles.
--- Nintendo has traditionally relied on the Chinese factories of contract assembly companies to make its hardware.
--- People involved in the supply chain said production in Southeast Asia has started for the Switch.
--- A spokesman said Switch is now mostly made in China and Nintendo is always exploring options.
--- The tariffs might not be adopted if tensions ease between the world's two largest economies.
Why This Matters
President Trump and Chinese leader Xi Jinping are set to meet in late June in Osaka, the center of the Japanese region that includes many electronics makers including Nintendo and Sharp.
Videogame platform owners tend to sell hardware at a thin profit in hopes of earning revenue from more-lucrative software sales. If Nintendo had to pay a 25% tariff to import its consoles into the US, it might be forced to sell them at a loss -- something the company has said it wants to avoid.
A fuller story is available on WSJ.com
WSJ City: The news, the key facts and why it matters. Be deeply informed in less than five minutes. You can find more concise stories like this on the WSJ City app. Download now from the App Store or Google Play, or sign up to newsletters here http://www.wsj.com/newsletters?sub=356&mod=djemwsjcity